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Court sets aside order on interim compensation deposit under Negotiable Instruments Act, cites lack of reasoning The Court set aside the Trial Court's order directing the petitioner to deposit interim compensation under Section 143(A) of the Negotiable Instruments ...
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Court sets aside order on interim compensation deposit under Negotiable Instruments Act, cites lack of reasoning
The Court set aside the Trial Court's order directing the petitioner to deposit interim compensation under Section 143(A) of the Negotiable Instruments Act, finding it lacking proper reasoning and misinterpreting the law as mandatory. The matter was remanded back to the Trial Court for further consideration within one month of the order's receipt.
Issues: 1. Quashing of criminal complaint bearing NACT-140/2020 2. Challenge to order dated 24.09.2021, Annexure P-4, regarding deposit of interim compensation
Analysis: Issue 1: Quashing of criminal complaint bearing NACT-140/2020 The petitioner sought to withdraw the petition to quash the criminal complaint bearing NACT-140/2020 and requested liberty to raise the same before the Trial Court. The petitioner challenged an order dated 24.09.2021, Annexure P-4, passed by the Trial Court, directing the deposit of Rs.1,20,000 as interim compensation under Section 143(A) of the Negotiable Instruments Act. The respondent had filed a criminal complaint against the petitioner under Section 138 of the Act, and the Trial Court directed the petitioner to deposit 20% of the cheque amount as interim compensation to the complainant.
Issue 2: Challenge to order dated 24.09.2021, Annexure P-4, regarding deposit of interim compensation The Trial Court, after finding a prima facie case against the accused, directed the deposit of interim compensation based on Section 143(A) of the Negotiable Instruments Act. The petitioner contended that the order was passed mechanically without proper application of mind. The counsel argued that recent judgments from Delhi High Court and Karnataka High Court held that Section 143(A) is directory, not mandatory. The Court noted that the Trial Court's order lacked proper reasoning and misinterpreted the law as mandatory. Consequently, the Court set aside the impugned order and remanded the matter back to the Trial Court for further consideration within one month of the order's receipt.
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